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Technology Stocks : Amazon.com, Inc. (AMZN)
AMZN 231.69+1.7%3:59 PM EST
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To: Sarmad Y. Hermiz who wrote (42969)2/27/1999 9:07:00 PM
From: GST  Read Replies (2) of 164684
 
Movements in the yen are a good proxy for capital flows. If the yen is being bought it indicates a flow of funds out of the US. There are at least two main drivers -- the Japanese government sale of bonds to finance public works to make the economy seem like it is getting back on its feet as well as to recapitalize failing banks, and second -- the repatriation of funds to buy stocks that are being sold off by Japanese companies to unwind cross-shareholdings prior to their year end in March. It makes no difference whether they sell US stocks or bonds -- money leaving the market will leave a whole that must be filled by the money that is left in the US market which will shift around like water to fill the whole. If the Japanese sell US bonds it will hit US stocks. This is the real threat to bond yields and our stock market -- not fears of growth which will only take us up to 6% max. A big withdrawal of Japanese held funds could take us much, much higher.
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